Public Health Care Costs Less, Delivers More

Public health care is sustainable – in fact, it’s a far better deal than private for-profit health care. It also gives Canadians better quality and more accountability.

Public health care spending remains 8 per cent of our national income (gross domestic product),1 and it is slowing – up only 3.3 per cent in 2011 and 2.9 per cent in 2012, compared to 7 per cent annual increases over the previous decade.2 Spending on Medicare (hospital and physician services) has been even more stable at 4 to 5 per cent of GDP over the last 35 years.3

Most peer countries spend more on health care through the public sector; 10 OECD countries spend more than 80 per cent publicly compared to our 70 per cent. Canada is among the bottom third.4

Private sector health spending as a share of total health spending increased from 25 to 30 per cent between 1989 and 2010.5

Prescription drugs have increased as a share of Medicare spending from 1.7 per cent to 8.5 per cent since 1975.6

Physician payment has risen faster than inflation and is now the fastest growing category of health spending,7 largely due to fee increases.8

Between 1988 and 2009, per capita spending on private health insurance increased from $139.40 to $664.10.9

Ontario paid 75 per cent more to for-profit labs than it had to non-profit community labs over the previous 30 years, for the same tests.10

Public-private partnerships are 83 per cent costlier to finance than public projects.11

Seniors, hospitals and workers are not driving costs through the roof, as some claim.

Cost increases related to population aging are manageable – roughly 1 per cent per year over the next 25 years.12

Hospitals declined from 55 per cent of public health care costs in 1975 to 36 per cent in 2009.13

Wages, salaries and benefits have declined as a share of hospital operating costs from a high of 75 per cent in the late 1970s to just over 60 per cent in 2008.14

Governments spend a larger budget share on health care because they slashed revenues and other spending. Between the mid-1990s and late-2000s, Canadian governments cut taxes by 6 per cent of GDP and Medicare costs increased by 1.5 per cent of GDP.15

Our public health care system provides better care at lower costs. We spend roughly half of what the private US system spends per person,16 and we get better coverage and outcomes.

We cover everyone, where the US system leaves 49 million uninsured17 and another 25 million underinsured.18

More than 26,000 Americans die each year because of lack of health insurance.19

Medical problems are the leading cause of personal bankruptcy in the US.20

Studies comparing US and Canadian outcomes for heart attacks, cancer, surgical procedures and chronic conditions show that Canada does at least as well, often better.21

Public health care costs less than private health care.

Administration costs 16.7 per cent in Canada (1.3 per cent for Medicare), compared to 31 per cent in the United States.22

Private for-profit hospitals cost 19 per cent more than not-for-profit hospitals in the US.23

A recent Canadian study found that expedited knee surgery in a for-profit clinic costs $3,222 compared to $959 in a public hospital (with worse return-to-work outcomes).24

“Private for-profit facilities typically have to generate 10 to 15 per cent profits to satisfy shareholders. Not-for-profit facilities can spend that money on patient care.”25

Patients treated in for-profit compared to non-profit dialysis clinics in the U.S. had an 8 per cent higher risk of dying. Fewer and less well trained staff and shorter treatments are likely the principal factors.26

Adults had 2 per cent higher death rates in for-profit hospitals, while the infant mortality rate was 10 per cent higher. Switching to a for-profit hospital system in Canada would mean 2,200 more deaths each year – more than deaths from suicide, colon cancer or car accidents.27